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Does Fear of Data Breach Keep You Up at Night?

Over the last four years of serving the WTIA member community, I have met some amazing technical leaders. One of the major perks of the job is to be able to openly ask these leaders about their business challenges. My question “what keeps you at night” consistently receives the same response – data security.

Usually what then follows is a mountain of statistics that quantifies the growth in digital data in our post-internet world. A stat that I have heard on numerous occasions is that web-enabled data doubles every year. I have always taken that feedback with a grain of salt for two reasons:

  •        90% of all statistics are made up (that is a joke!)
  •        If you are a CIO or CISO your job is to worry about data management and security

That said, I have noticed a marked difference in the nature and tone of these conversations over the last 12 months.  I am now hearing similar concerns about data security from the office of the CEO, CFO and/or VP of Marketing. Albeit for different reasons, cyber-fraud is having a profound impact on executives in all functions.

The Target scandal, in my opinion, has been the lightning rod event that has elevated data security as a major business issue for employer.  The magnitude of the people impacted (over 70 million customers) in the Target breach was significant, however, what the fraud exposed was a far more concerning issue – the potential brand damage associated with a data breach.

CC image courtesy of Twechie on Flickr
CC image courtesy of Twechie on Flickr

Brand management is why cyber-crime has emerged as a major topic of concern for CEO’s. Losing consumer confidence has a catastrophic impact on business and, in certain situations, can bankrupt organizations. In response to cyber-attacks employers have ramped up efforts to secure data but often overlook the how they would respond to the market in the event of a breach. Post-breach is where costs quickly get out of control and where brand gets damaged.

Luckily, there are some basic tools that can help employers deal with cyber-crime effectively and in a timely manner. A best practice for all employers who house sensitive data is to develop a breach response plan and communicate this plan to employees. Having a plan to deal with cyber theft in the first 24 hours can help mitigate brand damage.

Another useful tool is cyber insurance. In the past, cyber insurance policies have been expensive, hard to sign up for and often not well understood by the broker community. In today’s environment there are helpful insurance solutions that protect an employer both pre and post breach. I highly recommend any employer who transacts online or houses confidential consumer information to purchase cyber insurance.

In response to the increasing risk of cyber-crime and feedback from our members, the WTIA has created a new cyber-insurance product offering for our members. The product has been designed for the technology community and covers pre and post breach costs. Of particular value is the coverage related to notifying customers and loss profits from business interruption. Interested in learning more?

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